Frequently Asked Questions
This is not a comprehensive list. These questions and answers are fairly generic by nature, as each situation is unique and deserves individual attention. Please call us for a FREE 15-minute telephone consultation (501-843-9014) where we can determine how we may be of service to you and/or your loved ones.
DISCLAIMER: THE INFORMATION CONTAINED HEREIN IS DESIGNED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL ADVICE. PLEASE CONSULT YOUR ATTORNEY OR OTHER QUALIFIED PROFESSIONAL ADVISER BEFORE TAKING LEGAL ACTION.
Long Term Care Medicaid (aka Pay the Nursing Home)
1. How do I keep the nursing home from taking my mother’s house?
A person’s home is an exempt asset in Arkansas. This means that a person going into a nursing home can keep their home and still receive Medicaid long-term care benefits (if otherwise qualified). However, DHS may collect the amount that it has paid after the beneficiary’s death by electing to “re-coup” against his or her house. This means that after the beneficiary dies, DHS may sell the house to recover money it has paid in Medicaid payments. We have ways of preventing this from happening. Let us know if you need help!
2. What is Medicaid?
Medicaid is a cooperative, federal – state program. It is designed to meet the financial expense of medical services for the elderly, blind and disabled poor in Arkansas. Medicaid provides a wide range of benefits, including acute medical care, medications, outpatient treatment and long-term care.
3. Who administers the Medicaid program?
Funding for Medicaid comes from both the federal and state governments. Arkansas has designated the Department of Human Services (DHS) Divisions of County Operations and Medical Services to administer the Medicaid program in our state. The eligibility requirements and administration of the program are handled at the state level, subject to the oversight of the federal Health Care Financing Administration (HCFA).
4. Do I really have to spend everything down to $2,000 or less to get my Loved One qualified?
NO! While it is true that $2,000 is the maximum resource limit for Long Term Care Medicaid eligibility it does NOT mean that you must spend it all on Nursing Home care prior to applying. There are ways to protect yours or your loved one’s assets! Call us (501-843-9014) or set an appointment. Note: Please be aware that you can not simply transfer the money or property away. You also can not spend the money on anything unless it’s directly for your Loved One’s use/care. This includes reimbursements to yourself as a Caregiver without a prior contract.
5. What’s a Miller Trust? Will it magically fix everything and make my loved one eligible?
Nope. But it does help with Income. In order to be eligible for Medicaid, an applicant must have monthly income that’s less than $2,205 (as of 2018). But wait, the Nursing Home costs ~$6,000/month. You can see how this would be a HUGE problem for anyone with income between the Income Limit and the cost of Nursing Home care. The Miller Trust was created to solve this problem. All income must be deposited into the trust each month and NOTHING ELSE. Then only approved items can be paid from the trust (namely the Nursing Home). While it does fix the Income problem it DOES NOT fix anything to do with resources (cash, bank accounts, life insurance, home, land, property, etc). Also, there are a lot of stipulations with setting up and managing a Miller Trust. Learn more here
6. What about transfers? I heard there was a 5 year lookback period…
That is correct. Medicaid can and WILL look back up to 5 years to see if you transferred anything without proper compensation at fair market value. If you did, they will calculate the total transfers then initiate a transfer penalty based on the amount transferred. This penalty will prevent your Loved One from receiving Medicaid assistance with Nursing Home costs until the penalty expires which could be months or years from now. Don’t wait to address these transfers.. set up a Free Consultation and get the penalty period started today with a plan to save as much money and property as possible.
1. Why should I have a will?
A major advantage of a will is that it allows you to designate the person(s) who are to receive your estate at your death. You may have heard the old saying, “If you don’t have a will, the state has one for you.” The state does have a “descent and distribution statute” that provides for the distribution of assets for those people who die “intestate,” or without a will. The problem is that the state’s plan may be good for some and disastrous for others. One size doesn’t typically fit all. However, if you don’t have an estate plan in place prior to your death, you forfeit your right to choose. Another good feature of a will is that it allows you to specify the person who will administer your estate at your death. Once again, if you don’t make the decision, you forfeit your right to choose. Chances are a judge will approve whoever asks the court for the job – and it may not be the person you would have chosen.
2. What is the disadvantage of a will?
The major disadvantage of a will is the court process which happens after your death called “Probate.” A commonly held belief is that if you have a will, you don’t have to go through probate at your death – this is not true. If you have assets in your name only, at your death, probate is the process required to change title from your name to the next owner (hopefully someone you have chosen.)
3. What is probate?
Probate is the legal process of changing title to assets. Usually it is the only way to change title from one generation to another. There is usually no probate when the first spouse dies. Why? Married couples generally hold title to assets jointly. So when the first spouse dies, everything passes by operation of law to the surviving spouse. Probate usually begins after the death of the second spouse. The good news is that there are ways to avoid probate and make the distribution of assets much easier for surviving loved ones!
4. How long does probate take and how much does it cost?
Probate usually takes from 9 – 24 months and costs an average of approximately 3% of your estate to complete. Obviously the time and cost to complete the process could be more or less depending on the complexity of the matter, but these are good averages. The executor must get the court’s approval in advance – prior to taking any action to settle the estate – which is why the process can take so long. A probate attorney’s fees are set by state statute.
5. What is a Revocable Living Trust?
A Revocable Living Trust is the estate planning tool of choice for people who want to avoid probate at their death. “Revocable” means just that – once you establish a revocable trust, you can revoke or cancel it at any time. Since you are the Trustor (owner of the trust) you are in full control of the document and can maintain or do away with it at any time without asking the permission of anyone. “Living” simply means that the trust was established and funded during your lifetime, as opposed to being funded at death. (A trust funded at death is called a testamentary trust, which is a trust contained in a will. Assets of a testamentary trust are titled over to the trust at your death, which requires a probate proceeding.)
6. When should I not use a Revocable Living Trust?
If you have a very complicated estate and need the hands-on involvement of a court to untangle the mess, then you should prepare a will and allow your estate to go through probate. However most estates don’t need court involvement – they just want their assets to pass to their beneficiaries without the cost or hassle of probate.
7. What is a Bridge of Life Plan?
This is a an estate plan that incorporates the Revocable Living Trust mentioned above, but also includes 2 other critical factors that most people forget or ignore when doing their estate plan, which are (1) what do I want; (2) how will I pay for it? Find out more here. It sounds obvious, but most people only do a will or trust (which says who gets their assets when they die) but totally ignore the questions of what do I want it I am incapacitated before I die, who do I want helping to take care of me, where do I want to be if I can’t be at home by myself and do I have the money or property to pay for the care that I want or need.
I think you would agree that these issues are important – it’s a shame that they are so often overlooked. If you develop Alzheimer’s or some other incapacitating disease before your death and need care, it’s important to have a plan in place that addresses these concerns. When the parents fail to address them during their lifetime, they put the burden on their kids to try to figure it out. Give us a call at (501) 843-9014 and let’s get it figured out. Put your plan into action. Don’t forfeit your right to choose!